New Tax Treaty with Japan to enter into force

The new Tax Treaty between Japan and the Netherlands will be effective as from 1 January 2012. It has been ratified today by the Japanese Ambassador and Mr Weekers, the State Secretary for Finance.

The new Treaty had already been signed in Tokyo on 25 August 2010. Meanwhile, in both countries the ratification process has been completed. Today the last formal step has been taken in a short ceremony to have the Treaty become actually effective.

Large parts of trade and industry have looked forward to the Treaty becoming effective. For in the new situation, the source taxation between the countries will decrease. This makes it more attractive for Dutch companies to do business in Japan. At the same time, it becomes more interesting for Japanese companies to invest in the Netherlands. It strengthens even further the position of the Netherlands as the ‘gateway to Europe’ for Japanese companies.

After the new treaty with the United Kingdom, which became effective at the beginning of 2011, this is the second treaty with a major trading partner within a short time that has been drastically modernised by the Netherlands.

State Secretary Weekers is satisfied that the Treaty will soon become effective:

‘I realise that the Netherlands and Japan have already had excellent trade relations for more than 400 years now. And I also know that the Japanese business community in the Netherlands contributes in a considerable degree to our economy and vice versa. We can act for each other as the gateway to our region.

The low source taxation in the Treaty will result in tax obstacles to be decreased even further. In addition, the option to resolve any remaining disputes by way of arbitration, which is brand new for Japan, will lead to an increase of legal certainty for the taxpayer. The Treaty will benefit Japan and the Netherlands for many years to come.’